Indian e-commerce company Snapdeal.com is raising about $500 million from investors led by Alibaba Group Holding Ltd., according to people familiar with the matter.

The investment will value New Delhi-based Snapdeal at about $5 billion and include Foxconn Technology Group, said one of the people, who asked not to be named because the matter is private. Alibaba and Foxconn are each investing about $200 million, two of the people said.

SoftBank Group, an existing investor, may also participate in the latest funding round, one of the people said.

Snapdeal is in a three-way battle for dominance in the developing India market with local rival Flipkart Online Services and Amazon.com Inc. of the U.S. The Indian companies have drawn big-money investors from around the world seeking to repeat the success of Alibaba, which last year held the largest initial public offering ever.

The deal will forge an alliance between Snapdeal and Alibaba, China's leading e-commerce company, raising the prospect of partnering on technology and products.

SoftBank, the primary backer behind Alibaba, had previously put money into Snapdeal. Market leader Flipkart has drawn investments from New York's Tiger Global Management LLC and Accel Partners, the venture firm behind Facebook Inc.

Representatives of Snapdeal, SoftBank, Foxconn and Alibaba declined to comment.

The $500 million of investments were reported earlier by Re/code.

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